View from the Levee: The Foreign Beef Influx
[imgbelt img=fatgrasscattle1.jpg]The United States, a nation blessed with grassland for raising cattle, imports more beef than any country on earth. That’s because U.S. ag policy favors industrial production of corn and soybeans over plain old farmin’ and ranchin’.
The worst kept secret in journalism is that most of us got into it because we can’t do math.
In my case, it was childhood of subtraction that plunged me into a career of contractions. I clearly recall Mr. Tetting, my third grade teacher, spending most of 1963 and all of 1964 admonishing me to “Just carry the one to the left.”
Carry what one? And what’s left?
It’s a trick this pony has yet to master: Yesterday my bank statement revealed a rather large, three-figure difference between it and my checkbook. Go figure.
Thin as I might be in subtraction, I can add.
That’s more than can be said of the so-called leaders in cattle country. Consider the following numbers Daryll Ray and Harwood Schaffer, our good friends at the University of Tennessee’s Agricultural Policy Analysis Center, dug out recently.
U.S. cattle numbers, Ray and Schaffer say, are 21 million head lower today than 30 years ago (111.2 million in 1980, 90.8 million in 2012), domestic slaughter is 3 million head less (36.8 million in 1980, 33.9 million in 2012) and per capita consumption of beef is down a whopping 28% (76.6 pounds per person in 1980, 57.4 pounds in 2012).
While U.S. cattlemen now produce more meat per animal than in 1980, that increase cannot make up for the shortfall in production, slaughter or consumption. (There are nearly 100 million more Americans now compared to 1980.)
Imports can, however, and do. According to Ray and Schaffer, net annual U.S. imports of cattle grew from 615,000 head in 1980 to 2.1 million head in 2012.
“By way of contrast,” the Tennessee economists write, “cattle imports for the rest of the world stood at 1.0 million head in 2012, making the U.S. the world’s largest importer of cattle with virtually all of the cattle coming in from Canada and Mexico.” (Read the complete analysis here.)
That means imported tall-walkers now make up 6.1% of the U.S. slaughter total compared to just 1.7% in 1980.
The simple — but not too simple — answer is because we choose to raise other, more profitable commodities favored by government-directed ag policy, like corn and soybeans, rather than grass for cattle.
That favoritism compounds when taxpayer-subsidies compound.
For example, as much as most farmers like to tout their independence, growers of the two most-favored crops in the U.S., (again) corn and soybeans, receive a 62% taxpayer subsidy on federally backed revenue insurance.
That means for one-third the actual cost of the insurance, corn and soybean producers (and other grain and fiber producers) can lock in varying income levels — not the actual crop as the name implies — courtesy of well, you. What a deal, eh?
Corn growers get even more help: continued government mandates to blend corn-based ethanol into the nation’s gasoline supply.
In August, the Environmental Protection Agency, the government agency most farmers and ranchers love to hate, set the 2014 ethanol blending mandate at 14.4 billion gallons, an increase of 4.3% over 2013’s target of 13.8 billion gallons.
Moreover, by law the mandate is set to rise to 36 billion gallons by 2022. How much is 36 billion gallons?
If it were in effect today, nearly every bushel of corn grown in the U.S. this year would be turned into ethanol for fuel.
That’s not a bad deal if you’re growing federally subsidized corn. It’s a killer deal, however, if you’re feeding corn to cattle.
And it is killing. Since 1980, the number of farms and ranches that grow and sell cattle in the U.S. has dropped a staggering 42%.
Sure, recent droughts have helped dry up cattle and ranch numbers but, long-term, American ag policies firmly favor farm and ranch sectors that can be industrialized — corn, soybeans, poultry, hogs, vegetables — and disfavor plain old farmin’ and ranchin’.
Just do the math.
Agriculture journalist Alan Guebert lives in central Illinois.